a vacuum manufacturer has prepared the following cost data for manufacturing one of its engine components based on the annual production of 50,000 units​

Answer:

The Canadian dollar would appreciate

Explanation:

Real interest rate is nominal interest rate less inflation rate

exchange rate is the rate at which one currency is exchanged for another currency

if the real interest rate of the canadian dollar increases, there would be an increase in demand for canadian dollars. As a result, the demand for canadian dollars would increase. the increase in demand would lead to an appreciation of the canadian dollar

Answer:

a-The net present value in dollars is 494939.0687.

b-1-The required return on franc flows is 11.72%.

b-2-The net present value in Francs is 519686.02.

b-3-The NPV in dollars as calculated from NPV in Francs is $494939.07

Explanation:

a

In order to find the solution, firstly the exchange rate for the 5 years is calculated. It is calculated using the formula:

[tex]EER=CER*(1-GRD+GRF)^t[/tex]

Here

From this exchange rate, the PV factor is calculated which is than used to find the present value and similarly net present value in total. The solution is provided in the attached Excel Sheet.

The net present value in dollars is 494939.07

b-1

The required rate on the Franc return is given as:

[tex]FRR=(1+DR)(1-GRD+GRF)-1[/tex]

Here

So the value becomes:

[tex]FRR=(1+DR)(1-GRD+GRF)-1\\FRR=(1+0.14)(1-0.06+0.04)-1\\FRR=0.1172\text{ or }11.72\%[/tex]

The required return on franc flows is 11.72%.

b-2

Similar to part a, the solution is found for the return rate of 11.72 and the exchange rate is not required. The values are as indicated in the excel sheet attached.

The net present value in Francs is 519686.02.

b-3

In order to convert the Franc NPV to dollars, the exchange rate of 1.05SF is used which gives

[tex]NPV_{dollars}=\dfrac{NPV_{Francs}}{ER}[/tex]

Here

So the equation becomes:

[tex]NPV_{dollars}=\dfrac{NPV_{Francs}}{ER}\\NPV_{dollars}=\dfrac{519686.02}{1.05}\\NPV_{dollars}=494939.0666=\$494939.07[/tex]

The NPV in dollars as calculated from NPV in Francs is $494939.07

Answer:

see explanation

Explanation:

Indirect method method reconciles the Net Income to the Operating Cash flow by adjusting for non -cash items and changes in working capital included in Net Income.

Remember to show Cash flows from Operating, Investing and Financing Activities as these make up a full Cash flow Statement.

Answer:

Foto-FAst Copy Shop

1. Predetermined overhead rate = $4 per direct labor hour

2. Predetermined overhead rate = $11 per direct labor hour

3. Total job cost (Rick Anselm):

May 20 = $26.00

June 20 = $30.00

4. The two overhead rates:

a. $26.40 per machine hour

b. $3.71 per direct labor hour

Explanation:

a) Data and Calculations:

Average overhead per year prior to the purchase of the new equipment = $30,400

Average overhead per year after the installation of new equipment = $83,600

Budgeted direct labor hours for the year = 7,600

Wage rate = $9 per hour

1. Predetermined overhead rate prior to the purchase of the new equipment

= $4 ($30,400/7,600)

2. Predetermined overhead rate after the new equipment was purchased

= $11 ($83,600/7,600)

3. Cost of Rick Anselm's job on May 20:

Materials ($0.03 * 600) $18.00

Labor ($9 * 36/60)            5.40

Overhead applied            2.40 ($4 * 36/60)

Total cost of job =        $25.80 = $26

Cost of Rick Anselm's job on June 20:

Materials ($0.03 * 600) $18.00

Labor ($9 * 36/60)            5.40

Overhead applied            6.60 ($11 * 36/60)

Total cost of job =        $30.00

4. Overhead Rates         Photocopying     Computer Printing   Total

Overhead cost                   $55,440                $28,160              $83,600

Machine hours                       2,100

Direct labor hours                                               7,600

Overhead rates                  $26.40                     $3.71

Answer:

Marshall Inc.

1. Estimated Income Statement for the year ending October 31 (Absorption Costing)

Sales volume                                          40,000 Units    50,000 Units

Sales Revenue                                          $2,120,000      $2,650,000

Cost of goods sold:

Direct materials ($31.90 per unit)               1,276,000         1,595,000

Direct labor ($7.60 per unit)                         304,000            380,000      

Variable factory overhead ($3.50 per unit)  140,000            175,000

Fixed factory overhead                                   63,840              63,840

Total cost of goods sold                           $1,783,840       $2,213,840

Gross profit                                                  $336,160         $436,160

Expenses:

Fixed selling & administrative expenses       17,400              17,400

Variable selling & administrative expenses 55,263             69,079

Total selling & administrative expenses    $72,663           $86,479

Net income                                                $263,497         $349,681

2. Estimated Income Statement for the year ending October 31 (Variable Costing)

Sales volume                                            15,200 Units     16,800 Units

Sales Revenue                                             $805,600         $890,400

Cost of goods sold:

Direct materials ($31.90 per unit)                  484,880           535,920

Direct labor ($7.60 per unit)                           115,520             127,680      

Variable factory overhead ($3.50 per unit)   53,200              58,800

Variable selling & administrative expenses   21,000               23,210

Total Variable costs                                   $674,600           $745,610

Gross profit                                                  $131,000           $144,790

Fixed Expenses:

Fixed selling & administrative expenses       17,400               17,400

Fixed factory overhead                                 63,840              63,840

Total fixed expenses                                   $81,240             $81,240

Net income                                                 $49,760            $63,550

Explanation:

a) Data and Calculations:

Estimated Operating Results

Sales (15,200 x $53) $805,600

Manufacturing costs (15,200 units):

Direct materials 484,880 ($31.90 per unit)

Direct labor 115,520 ($7.60 per unit)

Variable factory overhead 53,200 ($3.50 per unit)

Fixed factory overhead 63,840

Fixed selling and administrative expenses 17,400  

Variable selling and administrative expenses 21,000

Answer:

Technology C

Explanation:

Total Cost = Fixed Cost + Variable cost * (Number of Units)

Total Cost for Technology A = $80000 + $2.20*(100,000 units)

Total Cost for Technology A = $300,000

Total Cost for Technology B = $120,000 + $1.85*(100,000 units)

Total Cost for Technology B = $305,000

Total Cost for Technology C = $130,000 + $1.65*(100,000 units)

Total Cost for Technology C = $195,000

Conclusion: The minimum total cost for 100,000 Unit is for process technology C, Hence this technology would be recommended

Answer:

$1,242,000

Explanation:

The new machine is to be recorded at its Fair Value which is $1,242,000 because the exchange has a commercial substance. Asset forgone is credited by its original cost, and accumulated depreciation till date of exchange is debited. Cash paid and loss or gain is adjusted as required. But the new asset is debited by the amount of its Fair Value on the day of exchange.

Answer:

Crash-n-Burn Computers

a. The average real return on Crash-n-Burn's stock is:

= 8.3%

b. The average nominal risk premium on Crash-n-Burn's stock is:

= 6.8%

Explanation:

a) Data and Calculations:

Average inflation rate = 1.5%

Average T-bill rate = 3%

Returns on stock:

Year 1 = 10%

Year 2 = -10%

Year 3 = 17%

Year 4 = 22%

Year 5 = 10%

Total returns  = 49%

Average returns = Total returns/number of years

= 9.8% (49%/5)

Average real returns

= Average returns on the stock minus the inflation rate

= 8.3% (9.8% - 1.5%)

Average nominal risk premium = return on the stock minus the return on the T-bill

= 9.8% - 3%

= 6.8%

Answer: 8.23%

Explanation:

Firstly, we will calculate the cost of debt which will be:

= Yield (1-Tax rate)

= 9% × (1-0.34)

= 9% × 0.66

= 5.94%

Then, the Cmcost of preferred stock will be:

= 7/(104-9.40)

= 7/(94.6)

= 7.39%

We will also get the value of the cost of equity which will be:

= (Dividend expected common/Price common) + growth rate

= (2.50/76) + 8%

= 3.29% + 8%

= 11.29%

For Debt:

Cost after tax: 5.94

Weight = 50%

Weighted cost = 5.94 × 50% = 2.97

For Preferred stock:

Cost after tax: 7.39

Weight = 1%

Weighted cost = 7.39 × 10% = 0.74

For Common equity

Cost after tax: 11.29

Weight = 40%

Weighted cost = 11.29 × 40% = 4.52

Weighted average cost of capital = 2.97 + 0.74 + 4.52 = 8.23%

Answer:

All equity plan:

EPS = $160,000 / 42,000 = $3.81

Plan I:

EPS = [$160,000 - ($108,000 x 7%)] / 39,000 = $152,440 / 39,000 = $3.91

Plan II:

EPS = [$160,000 - ($324,000 x 7%)] / 33,000 = $137,320 / 33,000 = $4.16

Plan II is better since the resulting EPS is higher than the other alternatives.

Answer:

The chosen option (considering enrollment costs and opportunity cost) is:

b) College course.

Explanation:

a) Data and Calculations:

Costs/Benefits

                           College Course          Community Course

Cost                              $2,600                         $1,390

Opportunity costs         -2,080                          2,080

Net costs                         $520                        $3,470

Distance to course      0.40 miles                    16 miles

                                  (walking distance)      (driving distance)

Timing of course          Weekday                     Weekend

Number of meetings    16                                 8

b) With the College course option, you will earn $2,080 ($260 * 8) weekdays to offset part of the enrollment cost.  With the Community course option, $2,080 will be lost in opportunity cost, thereby increasing the total costs incurred.  These costs are apart from the driving costs associated with traveling 16 miles to the Community Course at the local library.

Answer:

Product A - Joint Cost Allocated = $62500

Explanation:

To calculate the allocation of joint costs to Product A, we must first calculate the sales revenue or value for both products.

Total sales value - Product A = 100 * 2000  =  $200000

Total sales value - Product B = 120 * 1000  =  $120000

Total Sales Value = 200000 + 120000   =  $320000

The amount of Joint costs that will be allocated to Product A will be,

Product A - Joint Cost Allocated = (200000 / 320000) * 100000

Product A - Joint Cost Allocated = $62500

Answer:

Dr Payroll Tax Expense: $2,321

Cr FICA- Social security taxes payable $1,054

Cr FICA- Medicare taxes payable $247

Cr SUTA-State unemployment taxes payable $918

Cr FUTA- Federal unemployment taxes payable $102

Explanation:

Preparation of the March 31 journal entry to record the March payroll taxes expense

March 31

Dr Payroll Tax Expense: $2,321

($1,054+$247+$918+$102)

Cr FICA- Social security taxes payable $1,054

[($1,700*10)*6.2%]

Cr FICA- Medicare taxes payable $247

[($1,700*10)*1.45%]

Cr SUTA-State unemployment taxes payable $918

[($1,700*10)*5.4%]

Cr FUTA- Federal unemployment taxes payable $102

[($1,700*10)*0.6%]

(To record payroll taxes expense)

Answer:

10.83 %

Explanation:

Weighted average cost of capital = Cost of Equity x Weight of Equity + Cost of Debt x Weight of Debt + Cost of Preferred Stock x Weight of Preferred Stock

therefore,

Weighted average cost of capital = 12.70 % x 70.82 % + 4.956 % x 17.73 % + 8.40 % x 11.45 %

                                                        = 10.83 %

Remember to use after tax cost of debt.

Answer:

Winslow Inc.

a. I do not agree with management's decision and conclusions.  Before the elimination of the Running Shoes Department, the company recorded a total net profit of $7,900.  After the elimination, the company recorded a total net loss of $112,600.

b. Variable Costing Income Statement for the three products:

Winslow Inc. Product Income Statements—Variable Costing For the Year Ended December 31, 20Y1

1                                   Cross Training   Golf Shoes   Running

                                             Shoes                             Shoes

2. Revenues                      $850,000  $700,000   $635,000

3. Variable Costs:

Cost of goods sold             284,500     248,400     298,500

Selling & admin. expenses 293,100      175,500      216,000

Total variable costs            577,600     423,900      514,500

4. Contribution margin    $272,400    $276,100   $120,500

5. Fixed Costs:

Cost of goods sold            128,500        90,300     120,500

Selling and admin. exp.      95,900        82,400     143,500

Total fixed costs               224,400       172,700    264,000

6. Income (Loss) from

operations                       $48,000    $103,400  ($143,500)    $7,900

c. The impact of eliminating the running shoe line is the increase of the net operating loss from a net profit of $7,900 to $112, 600.

Explanation:

a) Data and Calculations:

Winslow Inc. Product Income Statements—Absorption Costing For the Year Ended December 31, 20Y1

1                                       Cross Training   Golf Shoes   Running

                                             Shoes                                  Shoes

2. Revenues                    $850,000.00 $700,000.00 $635,000.00

3. Cost of goods sold        413,000.00    338,700.00     419,000.00

4. Gross profit                 $437,000.00  $361,300.00   $216,000.00

5. Selling and

administrative expenses 389,000.00  257,900.00     359,500.00

6. Income (Loss) from

operations                       $48,000.00 $103,400.00  ($143,500.00)

1                                 Cross Training   Golf Shoes   Running

                                             Shoes                             Shoes

2. Revenues                    $850,000   $700,000   $635,000

3. Cost of goods sold

Variable cost                      284,500     248,400     298,500

Fixed cost                           128,500       90,300      120,500

Total cost of goods sold    413,000     338,700       419,000

4. Gross profit                 $437,000   $361,300     $216,000

5. Selling and

administrative expenses

Variable cost                      293,100     175,500       216,000

Fixed cost                            95,900      82,400       143,500

Total selling & admin.       389,000    257,900      359,500

6. Income (Loss) from

operations                       $48,000   $103,400    ($143,500)     $7,900

Elimination of the Running Shoes Department:

1                                 Cross Training   Golf Shoes   Total

                                             Shoes                        

2. Revenues                    $850,000   $700,000   $1,550,000

3. Cost of goods sold

Variable cost                      284,500     248,400       532,900

Fixed cost                           128,500       90,300        339,300

Total cost of goods sold    413,000     338,700        872,200

4. Gross profit                 $437,000   $361,300      $677,800

5. Selling and

administrative expenses

Variable cost                      293,100     175,500       468,600

Fixed cost                            95,900      82,400        321,800

Total selling & admin.       389,000    257,900       790,400

6. Income (Loss) from

operations                       $48,000   $103,400     ($112,600)

Answer:

Missing word: "1. Straight line.  2. Double-declining balance. Depreciation rate(20%)"

1. Straight line depreciation

Annual Depreciation = Cost - Salvage / Estimated Useful Life (years)

Annual Depreciation = $143,000 / 10

Annual Depreciation = $14,300

Depreciation Expenses = Annual Depreciation * Fraction of Year

2021: Depreciation Expenses = 14300 * 3/12

Depreciation Expenses = $3575

2022: Depreciation Expenses = 14300 * 12/12

Depreciation Expenses = $14,300

2. Double-declining balance

Depreciation Expense = Beginning of period Book value * Depreciation rate(%) * Fraction of Year

2021: Depreciation Expense  = $148000 * 20% 3/12

Depreciation Expense = $7400

Book Value = Beginning of period Book value - Accumulated Depreciation

Book Value = $148000 - $7400

Book Value = $140,600

2022: Depreciation Expense = $140,600 * 20% * 12/12

Depreciation Expense = $35,520

Book Value = Beginning of period Book value - Accumulated Depreciation

Book Value = $140,600 - $35,520

Book Value = $105,080

Answer:

d

Explanation:

Solution :

a). The current market value of the unlevered equity

   [tex]$=\frac{75\% \times \$52 \text{ million} + 25\% \times \$22 \text{ million}}{1+10 \%}$[/tex]

   = $ 40.45 million

b). The market value of the equity one year from now is

  [tex]$=(75\% \times \$52 \text{ million} + 25\% \times \$22 \text{ million})- \$18 \ \text{million}$[/tex]

  = $ 44.5 million - $ 18 million

  = $ 26.5 million

c). The expected return on the equity without the leverage = 10%

     The expected return on the equity with the leverage =   [tex]$=10\% +\frac{ \$22 \text{ million}}{\$ 26.5 \text{ million}}$[/tex]

= 0.93 %

d). The lowest possible value of equity without the leverage = $20 million - $ 18 million

= $ 2 million

The lowest return on the equity without the leverage = 10%

The lowest return on the equity with the leverage = 2 % as the equity is eroded.

Answer:

See below

Explanation:

1. Step 1

Determine the direct materials used in production

Beginning materials inventory

$33,000

Add materials purchases

$555,000

Less ending materials inventory

($29,000)

Direct materials used in production

$559,000

Step 2

Determine the cost of goods manufactured

Beginning work in process inventory

$28,000

Add manufacturing costs;

Direct materials used

$559,000

Direct labor

$252,000

Factory overhead

$176,000

Less ending work in process inventory

($35,000)

Cost of goods manufactured

$980,000

3. Step 3

Prepare the cost of goods sold

Beginning finished good inventory

$51,000

Add cost of goods sold

$980,000

Less ending finished goods inventory

($48,000)

Cost of goods sold

$947,000

Answer:

Indifferent special order price=$5.60

Explanation:

To determine whether or not Cork Company should accept the order, we will compare the variable cost of the order to the sales value . If the special order generates a positive contribution margin, then it should be accepted.'

The relevant cash flows to be considered here includes

1. Variable cost of the special order

2. Sales revenue from the special order.

Note that the fixed cost are general unavoidable costs which would be incurred either way. And therefore should not be considered .

variable cos per unit = 4.60 +1.00= 5.60

                                                                           $

Sales revenue from special order

(7×6,000)                                                       42,000

Variable cost (5.60× 6,000)                         (33,600)

Net income from special order                   8,400        

A special order price that will produce a net income of zero is that which will make  the Cork Company indifferent. And such price is that which equals to the variable cost of selling

Indifferent special order price = variable cost per unit = $5.60

Indifferent special order price=$5.60

The special offers under the cost accounting are the changes or the events arranged in between the regular business operations. The special offer is launched at lower or higher variable costs. This is done either to attract customers or to clear off the stock.

The correct option is e. None of the answer provided is correct.

The selling price per unit that is indifferent between accepting or rejecting the special offer is $5.60

As per the computation, the special offer should be accepted.

Computations:

The indifferent special order price should include only the variable cost.

[tex]\text{Indifferent price}=\text{Variable Production cost}+\text{Variable selling expense}\\\\=\$4.60+\$1.00\\\\=\$5.60[/tex]

Computation of net income from a special offer:

[tex]\text{Net Income}=\text{Sales revenue}-\text{Variable cost}\\\\=(\$7\times6,000)-(\$5.60\times6,000)\\\\=\$442,000-\$33,600\\\\=\$8,400[/tex]

For taking the decision of accepting  or rejecting the special offer:

To know more about cost accounting, refer to the link:

https://brainly.com/question/4340876

Answer:

A. 1.89 years

B. 2.33 years

Explanation:

According to the scenario, computation of the given data are as follows,

(A) After-tax income = $72,115

Expected cost = $250,000

Useful life = 4 years

Salvage value = $10,000

Depreciation Value = ($250,000 - $10,000) ÷ 4 = $60,000

Annual net cashflow = After tax income + Depreciation

= $72,115 + $60,000 = $132,115

Payback Period = Machine expected cost ÷ Annual net cash flow

= $250,000 ÷ $132,115

= 1.89 years

(B) After-tax income = $39,000

Machine cost = $200,000

Useful life = 8 years

Salvage value = $13,000

Depreciation value = ($200,000 - $13,000) ÷ 4 = $46,750

Annual net cashflow = After tax income + Depreciation

= $39,000 + $46,750 = $85,750

Payback Period = Machine expected cost ÷ Annual net cash flow

= $200,000 ÷ $85,750

= 2.33 years

Answer:

PBYI is not over priced

expected profit = $0.18

Explanation:

BID - ASK price : 59.00 - 60.00

expected alpha = 2%

In this scenerio ( positive alpha ) you can buy the PBYI at $60.00

when you buy at $60 the value will increase to ; 60 + ( 2% * 60 ) = $61.2

when you resell the security ( PBYI ) you will get ; ( 61.2 )* (59/60) = $60.18

therefore your expected profit = 60.18 - 60 = $0.18

PBYI is not not currently Overpriced since you can buy and make profit after selling the next day

Answer:

A. $32,000 clears the tax basis limitation

$14,100 basis in his Birch Corp. stock

$6,600 Birch Corp. debt

B. $16,900 clears the tax basis limitation

$0 basis in his Birch Corp. stock

$0 Birch Corp. debt

$15,000 suspended loss

C. $6,600 clears the tax basis limitation

$0 basis in his Birch Corp. stock

$0 Birch Corp. debt

$25,400 suspended loss

Explanation:

A. Based on the information given All the $32,000 amount of the loss will clear up the tax basis limitation which means that James’s stock basis will be reduced to $14,100 ($46,100 – $32,000 loss) while His debt basis on the other hand remains at $6,600.

Therefore:

$32,000 clears the tax basis limitation

$14,100 basis in his Birch Corp. stock

$6,600 Birch Corp. debt

B. Based on the information given of the $32,000 loss, $16,900($10,300+$6,600) will clear up the tax basis limitation, While his stock basis will be reduced from $10,300 to $0, and his debt basis will be reduced from $6,600 to $0. Which means that he has a suspended loss of $15,100 ($32,000 - $16,900)

Therefore:

$16,900 clears the tax basis limitation

$0 basis in his Birch Corp. stock

$0 Birch Corp. debt

$15,000 suspended loss

C. Based on the information given the amount of $6,600 will clear up the tax basis limitation. His stock basis will remains at $0, while his debt basis will be reduced from $6,600 to $0. Which means that he has a suspended loss of $25,400 ($32,000 – $6,600)

Therefore:

$6,600 clears the tax basis limitation

$0 basis in his Birch Corp. stock

$0 Birch Corp. debt

$25,400 suspended loss

Answer and Explanation:

The computation of the ending balance in the Accounts Receivable Assigned and Note Payable is shown below:

For account receivable assigned:

Beginning account receivable $100,000

cash collected -$300,000

Sales returns - $3,000

Cash collected during September -$50,000

Uncollectible account receivable -$2,000

Ending balance of the account receivable $15,000

For note payable

Beginning balance (90% of $100,000) $90,000

Interest on the loan (1% of $90,000) $900

Cash paid during the August -$30,000

Beginning balance of September $60,900

Interest paid (1% of $60,900) $609

Cash paid during September -$50,000

Ending balance $11,509

Answer:

Assets increase by $10,000

Total stockholders' equity decreases by $10,000

Explanation:

Assets increase =($110,000-$100,000)

Assets increase=$10,000

Total stockholders' equity decreases=$100,000-$110,000

Total stockholders' equity decreases= -$10,000

Therefore Based on the information given what is true of the net effect of the transaction are :

Assets increase by $10,000

Total stockholders' equity decreases by $10,000

Answer:

The Carlberg Company

Journal Entry:

Debit Work in Process (Painting Department) $36,000

Credit Work in Process (Assembly Department) $36,000

To record the transfer of 10,000 units from the assembly department to the painting department.

Explanation:

a) Data and Calculations:

Units started during November = 12,500

Assembly Department

                                              Units   Percent of Direct      Percent of

                                                          Materials Added    Conversion

Beginning work in process  3,000           70%                     30%

Units started during Nov.   12,500        

Units transferred out          10,000         100%                    100%

Ending work in process       5,500          80%                      30%

Cost of beginning work in process =    $2,130                   $940     $3,070

Costs added during the month:         $ 20,910            $ 22,360  $43,270

Total costs of production                    $23,040            $23,300   $46,340

Equivalent units of production:

Units transferred out          10,000         10,000                   10,000

Ending work in process       5,500          4,400                     1,650

Total equivalent units                             14,400                    11,650

Cost per equivalent unit:

Total costs of production                    $23,040                $23,300

Total equivalent units                             14,400                    11,650

Cost per equivalent unit                         $1.60                     $2.00

Cost assigned to:                         Materials           Conversion      Total

Units transferred out                   $16,000            $20,000        $36,000

                                              ($1.60*10,000)       ($2*10,000)

Ending Work in process                 7,040                  3,300           10,340

                                               ($1.60*4,400)         ($2*1,650)

Total costs allocated                  $23,040             $23,300       $46,340

Answer:

Queen's Gambit Corp.

Sicilian Defence Division

If the manager of the Sicilian Defence division is evaluated based on residual income, will she want to make an investment of $100,000 that would generate additional net operating income of $18,000 per year?

Yes.

The additional investment yields comparable positive Residual Income.

Explanation:

a) Data and Calculations:

Net operating income of Sicilian Defence Division = $60,000

Average operating assets = $300,000

Required rate of return for the company = 15%

Residual income (RI)= Operating Income - (Operating Assets x Required Rate of Return)

= $60,000 - ($300,000 * 15%)

= $60,000 - $45,000

= $15,000

Investment cost = $100,000

Additional net operating income = $18,000

Residual Income = $18,000 - ($100,000 * 15%)

= $18,000 - $15,000

= $3,000

Total residual income = $78,000 - ($400,000 * 15%)

= $78,000 - $60,000

= $18,000

Answer:

$1,380

Explanation:

Given that;

Accounts receivables = $288,000

Allowance for uncollectible accounts = $1,500 (credit balance)

Allowance should be 1% of accounts receivables = $288,000 × 1% = 2,880

Then, the adjustment = $2,880 - $1,500 = $1,380

Therefore, the amount of the adjustment for uncollectible accounts would be $1,380

Answer:

If the company decides to raise the selling price by $0.5, net income will decrease by $45,000

Explanation:

Giving the following information:

Unitary variable cost= $3

Number of units sold= 150,000

Selling price= $6.5

To calculate the effect on income, we need to use the following formula:

Net income= number of units sold*unitary contribution margin - fixed costs

Previous:

Net income= 150,000*3.5 - 350,000

Net income= $175,000

After:

Net income= 120,000*4 - 350,000

Net income= $130,000

Unitary contribution margin= 7 - 3= 4

Number of units sold= 150,000*0.8= 120,000

If the company decides to raise the selling price by $0.5, net income will decrease by $45,000